Political Update

The BHA has asked its leading political advisers, from a variety of political affiliations, to provide their analysis and outlook to help navigate the minefield, which you can read below.

General Election – Analysis and outlook

This weekend’s reshuffle shows Theresa May's weakness in having to keep most Cabinet ministers in place; Philip Hammond remains as Chancellor, Amber Rudd as Home Secretary and David Davis as Brexit Secretary. May found it expedient to appoint her rival Michael Gove as Environment Secretary and kept Boris Johnson as Foreign Secretary, despite rumours before the election that he and Hammond would be demoted.

The Prime Minister has again promoted key allies to influential positions, but will now be made to run a more open inner circle. Damian Green, a longstanding friend of the Prime Minister since Oxford University, has been promoted to First Secretary of State and Minster for the Cabinet Office. Green, a lifelong passionate pro-European, was a senior figure in last year’s Remain campaign. He is expected to be an advocate for a ‘soft’ Brexit and his appointment has been welcomed by the business community. The BHA built a good relationship with the Department for Work and Pensions under Green and hope to do the same with David Gauke, who replaces him.

May also promoted loyalist David Lidington to Secretary of State for Justice. Liz Truss was demoted to Chief Financial Secretary to the Treasury replacing Gauke, but she will still sit in the Cabinet. Karen Bradley was reappointed as Culture Secretary which provides continuity for the hospitality and tourism industry.

Conservative negotiations with Democratic Unionist Party

The Prime Minister will meet with Arlene Foster, leader of the Democratic Unionist Party (DUP) tomorrow (13 June 2017) to negotiate an expected confidence and supply agreement. The DUP has signalled the negotiations will last for a number of days over the week. The DUP’s main asks from Westminster revolve around May conceding an economic aid package to Northern Ireland, which could include an Air Passenger Duty and Tourism VAT cut for Northern Ireland and an assurance of no referendum on Irish unity.

Queen’s Speech will test Parliamentary calculations

The new minority government’s first test will be the Queen’s Speech, which had been scheduled for 19 June, but will now be delayed with a date to be confirmed. With the support of the important 10 DUP votes it is expected that May would thwart any attempt by Corbyn to defeat her. An alliance between Labour, SNP, Liberal Democrats, Plaid Cymru, Green and Independent MPs would maximum tally to 315 – two behind the Conservative’s 317. For May this makes Ruth Davidson’s 13 Scottish Conservative MPs crucial to her success over the coming months.

Potential leadership contest

May remains vulnerable to a vote of no confidence, which could be triggered by 15% of Conservative MPs at any time. In addition, the Conservative Party and the 1922 Committee, whom she is meeting tonight, could force her to stand down. For the short-term it looks like May will remain as Conservative leader and therefore Prime Minister.

When the Conservative leadership contest is triggered, assuming there are more than two candidates to succeed May, the parliamentary party will whittle them down to two to go to a vote of party members. Given the failure to subject May to proper scrutiny because of the withdrawal of Andrea Leadsom, there will be huge pressure to ensure a vote of members this time, notwithstanding the delay to the election of a new leader, and Prime Minister, this would create.

It is likely that the Conservative membership, and party, would want a Brexiteer like Boris Johnson or David Davis rather than Amber Rudd.

Second election?

The UK might see another election later this year to try and get a mandate and a working majority. However, the Conservatives might want to wait until September 2018 for the boundary changes to come into effect, which would reduce the number of constituencies from 650 to 600, favouring the Conservative party but the changes do require a parliamentary vote.

Labour, burgeoned by their recent gains, would most likely vote for an election and will continue to push over the coming weeks for May to stand down. Therefore, it is likely that the Conservatives will try to soldier on until the withdrawal part of Brexit has been agreed, which will take two years, as Labour would be the overwhelming favourite to win an election in the near future.

Call for BHA members to engage with Members of Parliament

The BHA and our affiliates in Northern Ireland will continue to work together to ensure that our voice is heard loud and strong in the next government. Over the last parliament we built good relationships with key Conservative MPs and engaged with the DUP through the All-Party Parliamentary Group, annual BHA Lobby Day and Campaign to Cut Tourism VAT.

Over the coming weeks and months, we will need your help to ensure our voice is heard on the detrimental impact of large rises to the National Living Wage, unfair hikes in business rates and the negative impact of Brexit on the industry, in particular with regards to immigration. The more unified the voice we present to the Government, the more chance we have of achieving our goals.

If you have any questions or would like to discuss any concerns, please do not hesitate to call the BHA Team on 0207 7404 7744.